Margotlog: Money Sense

Margotlog: Money Sense

When my sister and I received our allowances as kids, each week's outlay probably amounted to a quarter. In that distant era, when a loaf of sliced bread cost a nickle, and a bottle of milk not much more, a quarter was big money. We would walk across Marion Square, in Charleston, South Carolina, named for Francis Marion, the Swamp Fox, who fought the British during the Revolutionary War, and won. From our doorway in The Old Citadel's King Street wing to the other side of Marion Square sliced the city block at a diagonal. There, on Meeting Street, half a continent away, hunched a tiny grocery story. Sometimes we bought our mother a loaf of bread but more often we purchased candy cigarettes with pink-tipped flames, or Mars bars, with their swoosh of stellar dust, or tiny wax bottles of disgustingly sweet liquor tinted green, purple or maroon. We spent our allowances, our "own money."

My mother had excellent money sense. She'd grown up in comparative wealth, half a continent away, on another diagonal, from coastal Carolina to her North Dakota hometown. Hankinson was tiny in comparison with Charleston, but it sat in the midst of acres of winter wheat, oats, and rye. Her father, though not a banker, propped up the town economy by selling furniture, caskets, and funeral arrangements. He eventually become an absentee landlord of four farms nearby clustered around a small lake. He acquired these during the Depression, my mother told me later. The owners hadn't the cash to pay the taxes, but he did. That's all it took. Later, in the 1950s, gravel was discovered beneath one of the sand hills at one edge of the lake. This gravel, sold to the county and state to improve rural roads, made my grandfather a wealthy man.

My father, on the other hand, earned only a modest college professor's salary, but with outlays of money from North Dakota, my parents were eventually able to buy a piece of property across the Cooper River in Mount Pleasant. There they built a bungalow. Now we lived not in a small city, but a really small town. During the 1950s Mount Pleasant was forging connections across the nausea-inducing Roller Coaster bridge to Charleston, but many parents of my school friends still worked locally. My father, one of those early pioneers who commuted to work in Charleston, brought home more money (I'm thinking around $15,000 a year) than lots of other working parents. When I entered high school, my mother returned to work

"B.B., before babies," as she used to quip, she worked in Pittsburgh in various college and university libraries, using her library degree from the University of Minnesota. She'd graduated in 1929, at the beginning of the Depression. As far as I know, she had no college tuition debt. But she would learn quite a bit about economizing. In order to afford her first trip to Europe with my father, in the late 1930s, she ate oatmeal twice a day. She bragged about this economizing. Later when we lived in Charleston, I watched her do the budget, sitting at the kitchen table with checkbooks and bills spread around her. It was the lists of expenses, written on the backs of envelopes--columns of tiny cramped figures--that caught my attention.

When I went to college in Baltimore, North Dakota money paid for it too, and I still had an allowance which arrived every month, a check written in my mother's tiny crabbed hand. It was probably $25. Only once during those four years was I "flush" with funds: when I won a literary prize and spent the $100 on a portable stereo and several record sets of Brahms and Mozart.

My mother's example has stood me in good stead because I, too, have had to make do at various times over the years. I have never borrowed money for anything other than a big purchase, a car, or a house. I did not enter adulthood with a load of debt. North Dakota wheat money, in part, saw to that, but equally important was my mother's money sense. She knew how to "put by" for bigger expenses. She knew how to buy second-hand, and "make do." She knew how to cook inexpensive meals. She knew how to prioritize desire and save for those luxuries--almost always intangibles like concerts, higher education and overseas travel, which meant to her the bliss of escape and storing up knowledge and aesthetic experience to enrich the inner life.

Recently I had a conversation with a masters level student who wants to write his final paper on the weight of college debt among his generation. In five minutes, he's painted a picture of ignorance, predatory lending from big banks, and long-term onerous consequences. At age 17, he walked into a Wells Fargo bank in the Twin Cities and asked for information about college loans. "I knew nothing about borrowing money," he tells me. Without doing a credit check, the bank extended him what was in essence a credit card for his tuition and living expenses. The percentage the bank could charge was variable, according to the agreement, which, of course, he was too young and ignorant to check. At some points over his four years at the University of Minnesota, the interest rate rose as high as 25%. To add insult to injury, the University discouraged students from working more than 10 hours a week. Though I appreciate this limitation, I'm also appalled at it. When this young man graduated, he had accumulated $46,000 worth of debt.

It took him only a year of attempting to live on his own, and working at a modest-paying job, to realize that the only way he could ever pay-down the debt was to move home. This he has done. He calculates that two years of having no rent costs has whittled $10,000 from the principle. Soon he will return to the rental world but with a roommate. Now with his better paying job, and a roommate sharing rental expenses, he calculates that he'll pay off the debt in three-five years.

How different from my college expenses, saved for in part by my mother, funded in part by my grandfather's gifts. I graduated with no debt and luckily a fellowship to graduate school, where again, a combination of family savings and gifts paid my dorm costs. My student will pay down his debt until eventually he has erased it, but the financial bind it put him in has forced him to take work that was not his first choice, forced him to live at home for several years, and delay marriage and children. None of these is life-threatening. He seems to have health and now a greater degree of financial savvy, as well as college and master's degrees. Far from pitiable.

Still, I'm appalled and incensed. He was clearly far too young to realize the hole the bank had waiting for him. And I'm willing to bet, he also hadn't much younger training in saving and going without. Still, the onus of this problem lies with the bank. Just as there's been a public outcry against predatory credit card solicitations among college students, we need to raise our voices against predatory college loans. NOTE: these are not federal loans, but local bank loans which many students need to supplement federal grants.

Now I have another reason to look askance at the chirpy, excessively friendly (let's say intrusive) clerks at the Wells Fargo windows where I bank. If I were a naive high school student, their chattiness would indeed translate into safety and comfort. It is, in fact, the exact opposite. It's part of the package of enticing the ignorant young into signing up to be fleeced. I'm collecting stories from other clients of Wells Fargo: almost to a person, we hate this intrusive, smarmy friendliness. We're old enough to know where it can lead.